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Advancing Industry Transformation

The purpose of the Foundation for a Smoke-Free World (the “Foundation”) is to improve global health by ending smoking in this generation. Our task is urgent. More than a billion people smoke worldwide, and more than seven million global deaths are attributed to tobacco use each year.

In support of its mission, the Foundation’s Industry Transformation efforts focus on attaining change within the global tobacco industry and nicotine ecosystem. The Smoke-Free Index™, which is the first action of the Foundation’s Industry Transformation initiative, will provide quantifiable evidence over time of what steps the largest tobacco companies are taking to support or impede the transition to a smoke-free world. Specifically, the Smoke-Free Index™ will evaluate 15 of the largest tobacco companies in the world. The Foundation established consultancy agreements with global market research company Euromonitor International and leading think tank and advisory firm SustainAbility for the creation of the Smoke-Free Index™, the first report of which will be published in mid-2020, with regular updates thereafter.

Establishing a complete data set encompassing the companies that produce nicotine-based products is a necessary precursor to developing effective policies that promote the Foundation’s purpose. The Global Trends in Nicotine report contributes to laying the groundwork for the Foundation’s work, and represents an important step in the Foundation’s research program. Specifically, this report identifies the major players in nicotine delivery, outlines their product organization and geographic focus, and quantifies their output primarily on a relative basis.

Many “dirty” and unhealthy legacy industries can change, and are changing, by undergoing a transformation toward cleaner activities and products. The Foundation’s work contributes to this discussion by presenting six case studies of companies that undertook significant business transformations. The six cases demonstrate varying motivations and, as business transformation is not without risk, some of the companies performed better than others. That said, the tobacco industry sells a deadly product – cigarettes – which some consumers are rejecting. Transformation of the tobacco industry can provide an enormous and crucial acceleration to the process of eliminating combustible tobacco. The Foundation believes the appropriate way to influence industry is indirectly through strategic partnerships. In particular, we believe the investor community is a powerful, yet mainly underutilized, lever with which to influence company management.

The Foundation’s Industry Transformation strategy aims to attain transformation, in support of the overarching purpose, in a manner that is compatible with the United Nations Sustainable Development Goals (SDGs) framework. The Foundation will develop and implement the Smoke-Free Index™ as a means to critically evaluate tobacco industry progress and assess any actions taken that either support or impede progress toward a smoke-free world. The Smoke-Free Index™ will complement the World Health Organization Framework Convention on Tobacco Control (WHO FCTC) efforts by further examining the necessary future transformation of the tobacco industry and nicotine ecosystem, as well as by considering ways to change the core products that are responsible for preventable and premature deaths and numerous diseases. To accomplish this undertaking successfully, we must and will engage all stakeholders with the material ability to affect change for the good. We will report all companies that impede progress in fair, verifiable, and systematic ways. We will encourage the development of metrics that investors, policy makers and all stakeholders understand, value, and utilize.

The Foundation believes that innovation and consumer-driven demand are part of the solution, in addition to policy prescriptions. The record shows that implementation of policy strategies alone is not achieving the degree and speed in the reduction of the prevalence of cigarette smoking that is desired – and witnessed, for example, in certain countries such as Japan and South Korea. The Foundation believes now is time to bring all forces together to achieve a smoke-free world.